ThyssenKrupp to Cut 2,000 Jobs as It Seeks Europe Steel Savings

ThyssenKrupp AG, Germany’s biggest
steelmaker, intends to save 500 million euros ($670 million) by
reorganizing its European steel business and cutting more than
2,000 jobs to reduce excess capacity.

ThyssenKrupp is considering “the closure, relocation or
sale of business units and facilities,” the Essen-based company
said in a statement today. Plants in Germany’s Ruhr region and
Spain may be affected by the plan. Asset disposals could lead to
a further 1,800 employees leaving the company.

“The Steel Europe business area’s new management team has
developed a package of measures to sustainably improve the steel
unit’s profitability and competitiveness,” ThyssenKrupp said.
“The optimization program plans to achieve a savings volume of
around 500 million euros by the 2014 to 2015 fiscal year.”

European steelmakers are grappling with unneeded furnaces
whose output is weighing on prices. The region can produce about
210 million metric tons of steel a year, while demand in a
“normal market” is 150 million to 160 million tons, according
to industry lobby group Eurofer.

Steel-industry earnings have slumped as Europe’s economic
crisis saps demand and slower Chinese growth weighs on commodity
prices. ArcelorMittal, the biggest producer, this week reported
its lowest quarterly profit in three years. The Luxembourg-based
company has shuttered plants and cut jobs in Europe as it moves
output to cheaper sites.

ThyssenKrupp is selling its Steel Americas and stainless
steel units as it cuts the number of business units to five from
eight while expanding non-steel operations. Waning demand from
the auto and construction industries has pushed down steel
prices and squeezed producers’ profit margins.